Work

Examining the Effect of Macroeconomic, Institutional, and Capital Market Drivers on Infrastructure Investment

Year: 2025

Type: article

Abstract: This work aims to identify the key drivers that have propelled infrastructure investment in the European Union. Using econometric analysis of panel data, we investigate the relative importance of macroeconomic , capital market, and institutional factors in determining infrastructure investment. All EU countries were selected (except Malta), and the data used centered on 1997 and 2020. Specifically, we use the Generalized Method of Moments (GMM) command to estimate the parameters in dynamic panel models. The use of the GMM econometric command in this research ensures more accurate and robust results, allowing for handling endogeneity and unobserved heterogeneity problems commonly encountered in panel data analysis . The results indicate that the macroeconomic variables overlap institutional issues and the local capital market's maturity level. Our findings shed light on the factors most relevant in driving infrastructure investment in the European Union and can inform the development of more effective public policies in this area.

Source: Economic Analysis and Policy

DOI: 10.1016/j.eap.2025.02.038

Authors: João Pedro Gonçalves dos Santos, Vítor Manuel Ferreira Moutinho, Mara Madaleno, Zélia Maria da Silva Serrasqueiro Teixeira

Institutions: University of Beira Interior, Universidade Lusófona do Porto, Universidade Lusófona, University of Aveiro

Language: English

Topic: Fiscal Policy and Economic Growth

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Industry, innovation and infrastructure, Decent work and economic growth

Open Access status: hybrid

Estimated APC paid: $2,890